A Study On Regulation Of Violations Of Large Scale Shareholding Changes

The rules for large-scale shareholding changes generally refer to "When the amount of a listed company’s issued shares that investors hold reaches the limit and the subsequent shareholding changes reach a certain percentage,shareholders shall report to securities regulatory agencies and make announcements ".Securities Law of the People’s Republic of China(revised in 2019)has made amendments to the rules for large-scale shareholding changes.With the further development of China’s capital market,it is necessary to summarize the practical experience in the past 20 years,to find out the shortcomings,and to make recommendations for the operation and improvement in the future.This article takes the large-scale shareholding change rules as a research object,and summarize the deficiencies of the large-scale shareholding change rules in China according to legislations in other countries,domestic practice cases,legislation history,and current status.Specifically,this article has in total four parts:The first is the introduction of the rule.Firstly,this part defines the concept of the rules for large-scale shareholding changes,and introduces the legislative system according to the latest amendments to the Securities Law.Secondly,it discusses the value of large shareholding changes in price discovery and company value enhancement,and focuses on the value of the slow-walking rule.The rules for Large-scale shareholding changes are conducive to discovery company price and increase company value.At the same time,combined with the legislative system and the capital market,this part hold the view that the core value of the walking rules is neutral,and its role is not to provide anti-acquisition approach,but to provide market transaction information.The second part is the practice of penalties for violating the rules of large shareholding changes.It is divided into two part: analysis of the overall situation and analysis of the specific characteristics of the cases.In the overall situation analysis,the quantity change,distribution of proportion and supervision efficiency of the cases are studied.In the specific characteristics part,this part focused on the identity characteristics of the parties,the amount of punishment,the proportion of changes in shareholdings,and the parties’ defenses.From the empirical point of view,there are problems in the current system including low efficiency of supervision and chaotic application of laws and regulations.At the same time,from the empirical perspective,the specific characteristics of such cases are summarized to provide a basis for the following analysis.The proportion of changes in equity indicated that in most cases the parties did not hold the purpose of the acquisition,so there may be institutional mismatches in the rules for large scale shareholding changes.The third part is the analysis of the existing problems and the causes.The problems of the disclosure rules for large-scale shareholding changes,the slow-changing rules,and restrictions on voting rights were raised.By combing the large-scale shareholding disclosure rules,it is found that there is a problem of confusion in the application of laws and regulations.The fundamental reason is that the large-scale shareholding disclosure rules are placed under the concept of acquisition.According to the legislative background of the walking rules,the analysis shows that the walking rules increase the cost of investment and disclosure.At the same time,this article analyzes the regulatory authorities’ execution in accordance with Article 204 of the Securities Law(2014),and finds that there is also confusion in the legal application of the rules and logical incompatibility in legal interpretation.Finally,through comparison with practical data,it is found that it is difficult to restrict voting rights for a long time.The fourth part is the recommendations for regulation on the violation of the rules for large-scale shareholding changes.From the perspective of comparative law,this paper proposes that the core of system improvement is to distinguish between acquisitions and large-scale holdings according to the problems found in the previous three chapters and principles of neutrality in securities supervision.On this basis,it is proposed that the large-scale shareholding disclosure system requires the establishment of a special chapter of disclosure,and the means for long-term restrictions on voting rights should be exercised with caution,and the slow moving rule being abolished.